Mandatory Construction Contract Provisions

Mandatory Construction Contract Provisions. The UA shall utilize template contracts provided by the DFA unless the DFA reviews and specifically approves an alternative, substantially equivalent contract form. All contracts for construction shall include provisions addressing the following: A. Labor Requirements: 1. Employee Protection Act: The Contractor must be required to comply with applicable provisions of MISS. CODE ANN. § 71-11-1 and § 71-11-3 concerning employee verification including compliance with the E-verify program. 2. Resident Labor: The Contractor must be required to comply with MISS. CODE ANN. § 31-5-17 and § 31-5-19 concerning use of resident labor. 3. Labor on Projects Utilizing Specified Funding: Where a project is utilizing funds received by state or local governmental entities resulting from a federally declared disaster or a spill of national significance, including, but not limited to, R.E.S.T.O.R.E, the Oil Pollution Act of 1990, or the Federal Water Pollution Control Act or similar legislation, the Contractor must be required to comply with hiring policies established by MISS. CODE ANN. § 31-5-37. 4. Wage Rates: Where a project is utilizing funds received by the federal government and such funding requires incorporation of Davis-Bacon Wage Rates or other prevailing wage requirements, such requirements shall be clearly identified in the contract. B. Bonds & Insurance: 1. Bid Security: The Contractor shall be required to furnish a bid bond of not less than 5% of the total of the Contractor’s bid amount. 2. Performance and Payment Bonds: The Contractor shall be required to furnish performance and payment bonds not less than the amount of the contract for any contract Twenty-five Thousand Dollars [$25,000.00] or more as required by MISS. CODE ANN. § 31-5-51 or § 31-5-52. Such bonds shall be issued only by a surety company authorized to do business in the State of Mississippi and listed on the United States Treasury Department’s list of acceptable sureties. Where the contract is less than Twenty-five Thousand Dollars [$25,000.00], payment shall be made in a single lump sum at completion as no interim payments are permitted where no bond is provided. 3. Insurance: The Contractor shall be required to furnish evidence of not less than One Million Dollars [$1,000,000.00] in general liability insurance for bodily injury and property damage for any contract exceeding Five Thousand Dollars [$5,000.00], as required by MISS. CODE ANN. § 31-5-51(7). Workers Comp insurance shall be provided for Contractors with five [5] or more employees, as required by MISS. CODE ANN. § 71-3-5. Owners and Contractors Protective Liability [OCP] coverage shall be provided for all contracts. Builder’s Risk coverage shall be provided for all projects except for those limited to solely demolition. Pollution coverage shall be provided on all contracts which present a significant risk of environmental damage. Documentation of insurance shall be required to be provided on ACORD or equivalent form prior to issuance of notice to proceed for any work. 4. All bonds and insurance shall be by a company with an AM Best rating of A- or better. C. Payments: 1. Partial, Progress or Interim Payments: The Owner shall be required to make payment when due and payable under the terms of the contract within forty-five [45] calendar days from the day payment is due and payable as required by MISS. CODE ANN. § 31- 5-25(1)(a) or such payment shall bear interest from the due date until paid at the rate of one percent [1%] per month until fully paid. 2. Final Payment: The Owner shall be required to make final payment of all monies owed to the Contractor when the project is certified as having been completed by the architect or engineers and approved by the contracting authority representing the Owner. If payment is not paid as required by MISS. CODE ANN. § 31-5-25(1)(b), then final payment shall bear interest at the rate of one percent [1%] per month. Neither final payment nor any remaining retained percentage shall become due until the Contractor submits to the architect or engineer (1) final application for payment, (2) consent of surety to final payment, (3) power of attorney, (4) Contractor’s affidavit of release of liens, (5) Contractor’s affidavit of payment of debts and claims, (6) Contractor’s guarantee of work, (7) Project Record Documents and (8) certificates, warranties, guarantees, bonds or documents as called for in the individual sections of the Project Manual. The final payment will be reduced by the value of any amounts assessed to the Contractor due to work performed by the Owner or Liquidated Damages where such amounts have not been otherwise reconciled. D. Retainage: 1. Partial, Progress or Interim Payments: Where a construction contract provides for progress payments, the Owner may retain not more than five percent [5%] of the estimated amount of work as permitted by MISS. CODE ANN. § 87-9-3. The Owner will be liable for interest of one percent [1%] per month on amounts exceeding what is allowed by statute. Contractors and sub-contractors on such contracts shall retain not more than the same amount from their sub-contractors or material suppliers or be liable for the same accrual of interest. 2. Final Completion: Retainage shall be released for work completed no later than sixty [60] days after the completion of the Contractor’s work provided all necessary certificates of occupancy have been issued. 3. Reduction of Retainage: On any contract in which the total amount is Two Hundred Fifty Thousand Dollars [$250,000.00] or greater, or on any contract with a sub- contractor regardless of amount, five percent [5%] shall be retained until the work is at least fifty percent [50%] complete, on schedule and satisfactory in the architect’s and/or engineer’s opinion, at which time fifty percent [50%] of the retainage held to date shall be returned to the Contractor for distribution to the appropriate sub-contractors and suppliers in accordance with MISS. CODE ANN. § 31-5-33. Retainage on future payments shall be withheld at a rate of two and one-half percent [2–½%]. E. Substantial Completion: 1. Preconditions: In order to be considered occupiable or utilizable by the Owner, all life safety systems must be operable and tested and the commissioning requirements [if any] for the work or designated portion thereof must be complete except for thermographs of electrical systems, trend log monitoring, seasonal testing, near- warranty end activities and verification of training sessions. 2. Notice: Upon notification by the Contractor and receipt of the Contractor’s punch list, the architect or engineer will promptly visit the site to determine whether the work or designated portion thereof is substantially complete. If, in the opinion of the architect or engineer, the work or designated portion thereof is not substantially complete, the architect or engineer will not proceed with the inspection and the architect or engineer will report the reasons for such determination to the Contractor. In such case, the Contractor shall then submit a revised list and request for inspection when these reasons have been resolved. 3. Owner Inspection: When the work or designated portion thereof is substantially complete and affirmed by the Owner, the architect or engineer will prepare a Certificate of Substantial Completion that shall establish the date of Substantial Completion, shall establish responsibilities of the Owner and Contractor for security, maintenance, heat, utilities, damage to the work and insurance, and shall fix the time within which the Contractor shall finish all items on the punch list consistent with MISS. CODE ANN. § 31-7-13(t) accompanying the Certificate. Unless otherwise provided in the Contract Documents, warranties required by the Contract Documents shall commence on the date of Substantial Completion of the work or designated portion thereof unless otherwise provided in the Certificate of Substantial Completion. F. Final Completion: 1. Notice: Upon notification by the Contractor(s) that the work is ready for final inspection and acceptance by the Owner, the architect or engineer will promptly visit the site and assess the state of the work to determine if it is ready for final inspection by the Owner. If, in the architect’s or engineer’s judgment, the work is not ready for final inspection, the architect or engineer will report the reasons for such determination to the Contractor. In such case, the Contractor shall then submit a revised request for final inspection when these reasons have been resolved. 2. Owner Inspection: Once the architect or engineer determines the work is ready for final inspection, the architect or engineer will call for final inspection of the work with the Owner for the purpose of determining whether the work is acceptable under the Contract Documents. The final inspection shall be conducted in the presence of the Owner and a list of defects or discrepancies, if any, will be compiled into a final punch list consistent with MISS. CODE ANN. § 31-7-13(t) furnished to all parties. 3. Final Acceptance Letter: Once corrections of all final punch list items have been confirmed by the architect or engineer, the architect or engineer will provide a letter recommending final acceptance of the work to the Owner. G. Substitutions and Product Options: 1. Specification Restrictions: Specifications shall be written so as not to exclude comparable equipment of domestic manufacture unless the DFA approves a request for specific equipment necessary to perform a specific job in accordance with MISS. CODE ANN. § 31-7-13(c)(iv). 2. Substitutions: A product or construction method that varies in one or more consequential characteristics, reference standards, or technical requirements from a specified product or construction method shall be considered a substitution. a. Requests for substitutions will not be considered during bidding. b. Requests for substitutions by Contractor will be considered within thirty [30] days after the Contract has been signed. c. A Contractor proposing substitution shall agree to pay for any additional Professional costs if acceptance of the substitution will require substantial revision of Contract Documents. d. A Contractor proposing substitution shall provide data relating to any delays to the construction schedule, if any, that will result from the proposed substitution. e. A Contractor proposing substitution shall provide accurate cost data on the proposed substitution if any project cost increases are anticipated or any cost savings are being offered for proposed substitution. f. Substitutions of foreign manufacture will not be considered unless Contractor can sufficiently document that either no product of domestic manufacture meeting the product specifications is readily available that can be provided within the time constraints of the project requirements or the cost to provide a product of domestic manufacture meeting the product specifications is significantly greater than the proposed product substitute. g. Substitutions of products with those of less percentage of recovered material as named product will not be considered unless Contractor can sufficiently document that either no product of equal or greater percentage of recovered material as named product is available that can be provided within the time constraints of the project requirements or the cost to provide a product of equal or greater percentage of recovered material as named product meeting the product specifications is significantly greater than that of named product. 3. Product Options: Specifications shall be written to foster competition in one of the following formats. a. For products specified only by reference standards or technical performance requirements, select any product meeting product standards by any Manufacturer. b. For products specified by naming a minimum of three [3] products or Manufacturers, select any product and Manufacturer named. Equivalent products of domestic manufacture containing not less than the same percentage of recovered materials as named products will always be accepted if equal in all consequential respects. c. For products specified by naming one [1] or more products and/or Manufacturers, but indicating the option of selecting equivalent products by stating “or equal” after specified product and/or Manufacturer, select the named product or any product of domestic manufacture containing not less than the same percentage of recovered material as named product meeting specified reference standards or technical performance requirements as represented by the named products and/or Manufacturers. d. For products specified by naming only one [1] product and/or Manufacturer as a “basis of design”, an equivalent product of domestic manufacture containing not less than the same percentage of recovered materials as the named product will always be accepted if it is equal in all consequential respects. e. For products specified by naming only one [1] product and Manufacturer and stating no substitutions will be accepted, no substitutions will be allowed. This option must have written approval by the DFA before bidding. Such approval will only be provided when such products are available to Contractor from more than one supplier or distributor. Products available only direct from Manufacturer or from a single supplier or distributor are considered “sole source” and must generally be procured separately. Sole source items required for integration into existing access control or fire alarm systems may be included in the general construction specifications subject to approval of the BOB and do not require PPRB approval. H. Taxes: 1. Contractor’s Tax: All construction contracts in excess of Ten Thousand Dollars [$10,000.00] are subject to a tax equal to three and one-half percent [3–½%] of the total contract price or compensation received in accordance with MISS. CODE ANN. § 27-65- 21, with the cost of such tax included within any construction bid price submitted. Any person liable for a tax under this section may apply for and obtain a material purchase certificate from the commissioner which may entitle the holder to purchase materials and services that are to become a component part of the structure to be erected or repaired with no tax due, provided that the Contractor applying for the Contractor’s material purchase certificate shall furnish the Department of Revenue a list of all work sublet to others, indicating the amount of work to be performed, and the names and addresses of each sub-contractor. 2. Municipal Special Sales Tax: Contractor is responsible for the payment of any applicable Municipal Special Sales Tax levied at the location of the work in effect at the time of bidding and the cost of such tax shall be included within any construction bid price submitted. I. Tariffs: 1. Contractors, sub-contractors, sub-sub-contractors, and material suppliers are solely responsible for the payment of any applicable tariffs on any goods or services incorporated in the work regardless of the date of the application of such tariffs.